The saga of Zetta Jet looks to be over, save for Chapter 7 bankruptcy liquidation. It comes about a week after an announcement that the luxury private jet operator had secured $8.5 million in funding and ends a bumpy two-year journey that included boardroom brawls, accusations of fraud and a September visit to Chapter 11.
Private Jet Card Comparisons first broke the news of the filing and reported on Zetta Jet’s long list of creditors that included FBOs, caterers, media, customers and various state, municipal and national governments and agencies. Founder and deposed Managing Director Geoffrey Cassidy who was accused of using company funds to buy personal luxury cars, real estate and yachts tried to stop the initial bankruptcy filing via his base in Singapore, however, the case continued forward in California ending with Zetta Jet’s November 30 shutdown.
According to AIN, “Court documents show that the trustee in the Zetta Jet bankruptcy case, Jonathan King, a partner and co-chair of DLA Piper’s white collar, corporate crime and investigations practice, has asked the court for a change from Chapter 11 proceedings to Chapter 7 proceedings. The change to liquidation came after the U.S. Court apparently denied Zetta Jet’s bid for new financing, a decision that was said to have come as a surprise.”
Corporate Jet Investor reported, “The abrupt closure of the operator is a surprise. It had agreed to financing from Nathanial Rothschild, a Zetta Jet customer and lessor, that would have allowed it to keep restructuring. Zetta Jet had planned to exit Chapter 11 next February and there were a number of credible prospective buyers. But, in court on Tuesday, a few creditors objected to the restructuring and forced it to file for Chapter 7.”
The business journal noted, “Zetta Jet has parked its 12 aircraft and staff received their last pay packet yesterday. It is hard to see why the creditors objected, particularly as there is a long record of US airlines using Chapter 11 to restructure successfully.”
It also included the following statement: “Despite having a financing proposal from Scout Aviation, who is one of our lessors in what we planned as a reorganization in bankruptcy, the Court has surprisingly refused to sanction this investment and the continued operations of our company that you have all worked so hard to build and mature,” said James Seagrim and Matthew Walters, two of Zetta Jet’s founders, in an email to staff. “We are at a loss as to why this excellent financing package did not receive approval but it simply did not.”
The biggest creditors, according to court filings are Bombardier ($15.1 million) and Rolls Royce Deutschland ($4.1 million).